Florida regulators have signed off on a 14.5 percent increase in the cost of workers’ compensation insurance for every employer in the state. The rate increase has been in effect for all new and renewing workers’ comp policies since December 1, 2016, but this rate increase will impact some Florida industries substantially more than others. However, as of January 8, 2017, the implementation of this rule has been paused for now. Workers’ compensation pays benefits to workers who have been injured at the workplace.
When a worker in Florida sustains a job-related injury or falls ill due to workplace conditions, workers’ compensation insurance pays for that employee’s medical bills, pharmaceutical prescriptions, hospital costs, lab tests, and other diagnostic procedures. Worker’s compensation also partially reimburses lost wages and mileage to and from doctors’ visits and the pharmacy. Every year in the United States, working people suffer nearly three million job-related injuries and illnesses. The workers’ compensation system in every state protects employers from becoming the targets of personal injury lawsuits.
In the state of Florida, high-risk industries such as construction or roofing may pay as much as a dollar in workers’ compensation insurance for every $4 they pay in salaries. Others, like Mark Folmar, who owns a pawn shop located in Tallahassee, pay about 80 cents in workers’ compensation insurance for every $100 in wages paid. “It’s not like we’ll turn around and set our prices slightly different. We’ll try to make more money, which is what we try to do every year,” Folmar explained to the Capitol News Service.
HOW WAS THE RATE HIKE DETERMINED?
The workers’ comp insurance rate hike is a direct consequence of a pair of court cases which determined that portions of Florida’s workers’ compensation law were unconstitutional. In one case, reimbursement for an injured workers’ attorney’s fees had been limited to a dollar and fifty cents an hour. In the other case, total disability benefits had been limited to just two years. The 14.5 percent increase is for every business in the state, but it might have been more. The insurance companies were asking for a 19.5 percent raise. And since regulators cut five percent off the initial request, the insurance companies are expected to seek higher rates again this year.
The result of the two cases is that the Florida Supreme Court imposed limits on lawyers’ fees in workers’ compensation cases, and the court changed how long-term disability rates are calculated. While business groups insist that the cost of workers’ compensation insurance is too high, labor organizations are alleging that scores of workers in Florida aren’t being completely healed after being injured and therefore aren’t returning to work. In a January 2017 editorial, the Tampa Bay Times called the workers’ comp insurance rate hike “unnecessary,” and said, “the state’s economy will suffer and there will be the looming potential for job losses.”
The Times also reports, “There is every indication that the quest for comprehensive workers’ comp reform, including a new rate making process, will be one of the leading issues of the coming legislative session that opens in March.” The controversy revolves around the fact that in all but four of the fifty states, employers are allowed to shop around for the best workers’ compensation insurance rates.
WHAT MAKES WORKERS’ COMPENSATION DIFFERENT IN FLORIDA?
However, Florida and only three other states allow an insurance industry trade group, the National Council on Compensation Insurance (NCCI), to file just one set of rates for all workers’ compensation insurance carriers, thus eliminating any competition. The Times concludes: “It’s time for Florida to have a workers’ compensation system that addresses the concerns of all affected parties, centered on the injured workers and their employers — not just on the needs of the insurance companies.”
One Florida workers’ comp attorney writes – in an op-ed column in the Tallahassee Democrat – that the NCCI’s rate determination process is not transparent and that Florida businesses “can’t even get a break on their premiums by improving workplace safety. This is a seriously flawed system.” Susan Donegan, the chief regulatory services officer at the NCCI, responded: “We operate in one of the most, if not the most, transparent states in the country for the workers’ comp line.” Ms. Donegan also said that every rate and rule filing is available to the public, and there are open forum rate hearings where members of the public can speak and question the rate.
Florida’s thousands of business owners already know quite well that contracts, wages and hours, hiring and firing, liability insurance, and workers’ compensation insurance are all governed by a plethora of sometimes baffling and often redundant state, federal, and local rules, laws, guidelines, ordinances. and regulations. Full compliance with zoning, licensing, employment, and environmental laws is imperative for every business. The difficulties and risks for Florida’s small business owners seem to increase every year.
WHAT CAN BUSINESS OWNERS DO?
If you are a Central Florida business owner with questions or concerns about any legal or regulatory issue impacting your business, or if you are involved in – or if you anticipate being involved in – a business-related legal dispute, discuss your legal rights, obligations, and options with an experienced Daytona Beach small business attorney. The environment for businesses in Florida is always changing, so the best way to stay on top of those changes – and to stay compliant with the law – is to have the advice of an experienced small business lawyer.
If you’re a business owner in Florida, having a reliable Daytona Beach business attorney on your team – a lawyer who knows your operation and who’s committed to looking out for your best long-term interests – is the best way to reduce your risk and to keep small legal matters from blowing up into costly, lengthy legal disputes. An experienced business attorney can usually help a business obtain the most effective legal counsel available on a limited budget.
A good Florida business lawyer can also provide important legal advice and perspectives regarding almost every facet of your business, from workers’ compensation advice to zoning compliance and incorporation, lawsuits, and liability. In fact, in the 21st century’s highly regulated, highly litigious business milieu, the advice and services of an experienced small business attorney can be indispensable.